I'd like to update you on Prosper's late loan stats, but I can't.
On May 3rd, Prosper installed new software to process loan payments. There seem to be several problems with the new software.
On the same day, they have removed the Prosper loan performance data from the loan performance statistics web page. The page is still available, but since 5/3/2010 it has displayed the message "Marketplace data temporarily unavailable".
(In the meantime, you can refer to my most recent Prosper loan performance charts.)
Questions from lenders about when the loan performance data will reappear have gone unanswered. (One question from a lender posted on the prosper blog got a response saying the performance data will return, but not when. My own email to prosper on this subject has gone entirely unanswered.)
Meanwhile, the new payment processing software appears to be quite a fumble. In the last three weeks dozens of members have noticed anomalies in payment processing and have notified prosper about same. You can see these discussed in the comments section of the prosper blog, or on the prospers.org forum. It seems likely that most people don't look at the numbers in detail, so would not notice payment processing errors. If dozens are reporting errors, it seems likely that the snafu is widespread. If you have noticed such problems yourself, please contribute to the discussion on the prospers.org forum.
I noticed one myself, and emailed Prosper on 5/10/2010. I wrote:
I'm looking at note 8324-36. Looking at the note detail, I'm having trouble with some of the numbers.
I don't understand the "principal balance" column on the "borrower payments" tab.
The first April-12-2010 payment attempt drops the principal balance from $80.32 to $47.04, which looks about right. Later on April-12-2010, the payment is reversed, which jumps the principal balance to $142.79 . This is impossible.
Later on April-12-2010, another payment attempt is made, dropping the principal balance to $48.59 . At first I wondered why it didn't come back to $47.04 . Then I realized that the difference between these values is two late fees. But why is the guy charged two late fees for one payment?
Finally, I compared the principal balance column on the "lender accounting" tab to the principal balance column on the "borrower payments" tab, and found that they do not agree! One thing that borrower and lender must always agree upon is the principal balance!
I got a response thanking me, but the problem has not been fixed.
I suggest to all lenders that you look over the arithmetic in any loan where there have been late payments, or in which payments have been reversed. Look carefully at late fees. Look to see after a failed payment is reversed whether the principal comes back to what it was before the payment. Look to see whether the borrower tab and the lender tab agree on the loan principal.
Obviously Prosper installed this new software without adequate testing. Their recovery from this fumble is not encouraging. Have all the good software people left the company?
Meanwhile I wonder if the loan performance data will ever return. Seems quite possible that it is gone forever. This is a sad situation.
I remember three years ago when we had a similar situation on Prosper's collections performance data. I repeatedly pointed out that there were obvious errors in the data. Prosper took the collections data offline with the repeated promise that it would return as soon as some software which interfaced to the collections agency was repaired. Later the web page containing the collections data was removed, and the collections performance data was gone forever.
The best discussion among P2P and Prosper.com lenders is found on prospers.org. I hope to see you there!